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FED ER A L RESERVE BANK OF NEW YORK Fiscal A g e n t of the U n ited States ' Circular No. 7 4 0 4 June 4, 1974 OFFERING OF TWO SERIES OF TREASURY BILLS $2,600,000,000 of 91-Day Bills, Additional Amount, Series Dated March 14, 1974, Due September 12, 1974 (To Be Issued June 13, 1974) $1,900,000,000 of 182-Day Bills, Dated June 13, 1974, Due December 12, 1974 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text of a notice issued by the Treasury Department, released at 4 p.m. to d a y : The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $4,500,000,000, or thereabouts, to be issued June 13, 1974, as follow s: 91-day bills (to maturity date) in the amount of $2,600,000,000, or thereabouts, representing an additional amount of bills dated March 14, 1974, and to mature September 12, 1974 ( C U S I P No. 912793 U P 9 ), origin ally issued in the amount of $1,801,885,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,900,000,000, or thereabouts, to be dated June 13, 1974, and to mature December 12, 1974 (C U S I P No. 912793 V C 7 ) . The bills will be issued for cash and in exchange for Treasury bills maturing June 13, 1974, outstanding in the amount of $4,303,175,000, of which Government accounts and Federal Reserve Banks, for themselves and as agents of foreign and international monetary authorities, presently hold $2,529,650,000. These accounts may exchange bills they hold for the bills now being offered at the average prices of accepted tenders. The bills of both series will be issued on a discoiyit basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, Monday, June 10, 1974. Tenders will not be received at the Treasury Department, Washington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions and dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others will not be permitted to submit tenders except for their own accounts. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust com pany. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Only those submitting competitive tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders for each issue for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competi tive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on June 13, 1974, in cash or other immedi ately available funds or* in a like face amount of Treasury bills maturing June 13, 1974. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Under Sections 4 5 4 (b ) and 1221(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued here under are sold is considered to accrue when the bills are sold, redeemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder must include in his income tax return, as ordinary gain or loss, the difference between the price paid for the bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made. Treasury Department Circular this notice prescribe the terms of the conditions of their issue. Copies from any Federal Reserve Bank or No. 418 (current revision) and the Treasury bills and govern of the circular may be obtained Branch. T h is Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, M onday, June 10, 1974, at the Securities Department of its- H ead Office and at its Buffalo Branch. T ender form s for the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in the enclosed envelope marked “ T ender for T reasury B ills.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirm ation; no tenders may be submitted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued June 6, 1974, representing an additional amount of bills dated March 7, 1974, maturing September 5, 197 4 ; and 182-day bills dated June 6, 1974. maturing December 5, 1974) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JUNE 6, 1974) Range of Accepted Competitive Bids 182-Day Treasury Bills Maturing December 5, 1974 91-Day Treasury Bills Maturing September 5, 1974 Pricc Approx. equiv. annual rate Price H igh .................................................. L o w ..................................................... 97.940 97.888 8.149% 8.355% 9 5 .7 7 9 a 95.725 8.349% A verage 97.902 8 .3 0 0 % 1 95.740 8 .4 2 6 % 1 ........................................... Approx. equiv. annual rate 8.456% a Excepting one tender of $200,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 8.60% for the 91-day bills, and 8.92% for the 182-days bills. (81 percent of the amount of 91-day bills (47 percent of the amount of 182-day bills bid for at the low price was accepted.) bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve District) 91-Day Treasury Bills Maturing September 5, 1974 182-Day Treasury Bills Maturing December 5, 1974 • ........................... ........... Boston $ 51,295,000 Applied for Accepted Applied, for District $ 39,295,000 $ 30,020,000 Accepted $ 18,020,000 N ew Y o r k .................... ........... 2,967,575,000 2,128,075,000 2,859,960,000 1,618,045,000 P h ila d e lp h ia .................. ........... 30,350,000 30.350,000 14,550,000 14,550,000 Cleveland ....................... ........... 68,085,000 58,085,000 52,560,000 32,560,000 R ic h m o n d ....................... ........... 39,320,000 37,680,000 23,315,000 20,860,000 Atlanta ........................... ........... 35,715,000 33,070,000 30,030,000 23,650,000 ......................... ........... 168,735,000 105,355,000 142,700,000 71,700,000 St. L ouis ....................... ........... 49,055,000 31,675,000 49,525,000 21,675,000 M inneapolis .................. ........... 13,815,000 13,815,000 10,770,000 5,710,000 Kansas C i t y .................. ........... 39,310,000 39,310,000 31,745,000 26,965,000 Dallas .............................. ........... 26,130,000 26,130,000 22,660,000 17,660,000 San F r a n c i s c o ............. 86,205,000 57,205,000 111,730,000 28,730,000 Chicago T o t a l .................... ........... $3,575,590,000 $2,600,045,000b t>Includes $441,305,000 noncompetitive tenders accepted at the average price, c Includes $281,520,000 noncompetitive tenders accepted at the average price. $3,379,565,000 $1,900,125,000°
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